Silicon Valley Congressman Ro Khanna held a roundtable at his Santa Clara office Saturday, where he addressed a panel of leaders impacted by Silicon Valley Bank’s short-lived collapse and vowed to take swift action to protect depositors and insure banks from future failure.
“When you ask who a lot of these thousands of companies and organizations were, they were the climate tech start-ups. They were the start-ups in biotech. And these were the organizations that were actually serving the community,” said Khanna.
Among those organizations was Sunnyvale Community Services, a safety net for thousands of low-income families. Part of its services include providing fresh groceries to over a thousand such families each week. One out of 11 people they serve are unhoused.
Get a weekly recap of the latest San Francisco Bay Area housing news. Sign up for NBC Bay Area’s Housing Deconstructed newsletter.
Its executive director, Marie Bernard, told NBC Bay Area the organization was on pins and needles.
“The fiasco of all the - the fact the bank was closed down and acquired and is under the management of the FDIC right now, is very scary,” she said. “And at the point when we got the news about that, the first thought we had - our board - was ‘What about our million dollars?’ “
The organization took out a mortgage in 2019 to buy a larger office and more warehouse space. They put their million dollar loan in Boston Private. But in 2021, SVB acquired that bank. And with it: Sunnyvale Community Services’ mortgage.
Bernard said that until the non-profit can raise the funds needed to pay off the mortgage, that million dollars is trapped at SVB. And without it, they’re struggling to pay their bills.
“That’s what happens to our families,” said Bernard. “An emergency comes in, their card doesn’t work, they have a medical bill and this was like that catastrophe happening to us. Thank god, and thanks to the federal government.”
Khanna is currently drafting legislation that would require banks to pay an insurance premium, a measure that could protect banks and depositors in the future.
